A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Holst, Elke; Kirsch, Anja Article Financial sector: Share of women on corporate boards increases slightly but men still call the shots DIW Economic Bulletin Provided in Cooperation with: German Institute for Economic Research (DIW Berlin) Suggested Citation: Holst, Elke; Kirsch, Anja (2016) : Financial sector: Share of women on corporate boards increases slightly but men still call the shots, DIW Economic Bulletin, ISSN 2192-7219, Deutsches Institut für Wirtschaftsforschung (DIW), Berlin, Vol. 6, Iss. 3, pp. 27-38 This Version is available at: http://hdl.handle.net/10419/126171 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu WOMEN EXECUTIVE BAROMETER: BANKS AND INSURANCES Financial Sector: Share of Women on Corporate Boards Increases Slightly but Men Still Call the Shots By Elke Holst and Anja Kirsch (FU Berlin) In 2015, the share of women in the top decision-making bodies of For ten years now, DIW Berlin has been analyzing the the financial sector increased once again but men remain in the representation of women on the executive and manage- overwhelming majority and thus continue to call the shots. At the ment boards (subsequently executive boards), as well as on the supervisory and administrative boards (sub- end of 2015, women made up just under eight percent of executive sequently supervisory boards)1 of Germany’s financial board members of the 100 largest banks in Germany. The corre- and insurance services industry (subsequently the finan- sponding figure for the 59 largest insurance companies was a good cial sector).2 The analysis also shows the number of fe- nine percent. In both cases, this is less than a percentage point male CEOs and executive spokeswomen (subsequent- ly CEOs)3 as well as supervisory board chairs. The sur- more than in 2014. Even on supervisory boards where the share of vey includes the 100 largest banks based on total assets women is traditionally higher, both banks (with just over 21 per- and the 59 largest insurance companies based on reve- cent women on supervisory boards) and insurance companies (with nues from premiums.4 The representation of women on just over 19 percent) have a long way to go before achieving gen- the highest decision-making bodies of public banks and savings banks is compared to that of private banks and der parity. The proportion of women on the supervisory boards of cooperatives. Further, the present report examines the cooperative banks was particularly low (under 16 percent) despite gender balance on the highest decision-making bodies the fact that these institutions are, in principle, based on a partici- patory business model. Overall, many more women than men are 1 If an institution has both a supervisory board and an administrative board, employed in the financial sector. only the composition of the supervisory board was included in the calculation. 2 Most recently in 2015, see E. Holst and A. Kirsch, “Financial Sector: Share As is generally known, the presence of women in senior manage- of Women in Top Decision-Making Bodies Remains Low,” DIW Economic Bulletin, no. 4 (2015). ment in particular is a prerequisite for their promotion to top man- 3 In joint-stock companies, a supervisory board can appoint a CEO (Section 84, para. 2 of the German Stock Corporation Act (AktG)), while an agement bodies. The companies would therefore be well advised executive board can choose its own spokesperson. Although the principle of to improve the career opportunities of their most talented female collegiality and the position as primus inter pares applies both in the case of the CEO and the spokesperson of the executive board, the “decision to select a employees by promoting them more frequently and appointing spokesperson for the executive board (instead of the appointment of a CEO by the supervisory board) demonstrates a commitment to the complete validity of them to managerial positions. This would be a wise move in antici- the principle of collegiality, the position of spokesperson of the executive board pation of a possible expansion of the statutory gender quota and as primus inter pares and, at the same time, the rejection of a factual leadership role of the spokesperson of the board.” Because, in contrast to a CEO, internal a tightening of the sanctions set out in the new law on equality for board supervision and coordination functions are not part of the remit of a spokesperson of the board. See Schmidt, K. & Lutter, M. (eds.), Aktiengesetz: women and men in managerial positions, both in the private and Kommentar, 3rd ed. (Cologne: 2015), 1226–1227 and 1306–1308. public sectors, which was enacted in Germany in May 2015. 4 The largest banks and savings banks by total assets (2014) were selected according to S. Hirschmann, “Eine Branche im Stillstand: Top 100 der deutschen Kreditwirtschaft,” Die Bank, Zeitschrift für Bankpolitik und Praxis, no. 8 (2015): 8–11. The choice of largest insurance companies by income from premiums (2014) was based on Die großen 500. Deutschlands Top-Unternehmen (Müssig Verlag, November 2015). Corporations/groups with no supervisory board were excluded because they only exist as “combined brands.” Research into the composition of banks, savings banks, and insurance companies was conducted between November and the beginning of January 2016. For instance, new appointments in banks at the beginning of 2016 were considered. The data are based on online company profiles, annual reports, and financial statements from 2014, German Federal Gazette publications, as well as specific data requests made to the companies by DIW Berlin. DIW Economic Bulletin 3.2016 27 WOMEN EXECUTIVE Barometer: BANKS AND INSURANCES Table 1 of the European Central Bank (ECB) and of the nation- al central banks in the European Union. Share of women in employment subject to social insurance contributions by economic sector Women’s representation on the executive and supervi- In percent sory boards of companies outside the financial sector is discussed in a separate article in this issue of DIW 1999 2000 2005 2010 2014 2015 Economic Bulletin. That survey includes the 200 larg- 1 Provision of financial services 57.0 57.1 57.6 57.2 57.0 57.0 est companies outside the financial sector, listed compa- Central banks and credit institutions 57.2 57.3 58.0 57.6 57.7 57.8 nies on the DAX 30, MDAX, SDAX, and TecDAX, plus Insurance companies, reinsurance companies, 5 46.8 47.2 48.8 49.2 49.5 49.9 another 61 companies with government-owned shares. and pension funds (excluding social security)2 Taken together, the two reports show the extent to which Activities associated with financial and 60.2 60.0 62.1 60.9 59.4 58.8 insurance services3 women are represented in the highest decision-making bodies of over 500 companies across Germany. 1 Listed as “Credit Services Industry” up to 2008. 2 Listed as “Insurance Industry” up to 2008. 3 Listed as “Activities Associated with the Credit and Insurance Industry” up to 2008. Many more women than men employed Source: German Federal Employment Agency, Arbeitsmarkt in Zahlen, Sozialversicherungspflichtig in financial sector Beschäftigte nach Wirtschaftszweigen, (WZ 2008), Nuremberg, March 2015. For more than 15 years now, 57 percent of employees © DIW Berlin 2016 subject to mandatory social security contributions in Women make up the majority of employees in the provision of financial services. the “provision of financial services” sector have been women (see Table 1). In the field of “insurance, reinsur- ance, and pension funds (excluding social security),” the Figure 1 share of women increased by a good three percentage points to just under 50 percent during the same peri- Gender Pay Gap among full-time od. In the sector comprising “activities associated with 6 and part-time workers in 2014 by industry1 financial and insurance services,” the share of wom- In percent en was just under 59 percent (1.4 percentage points less than in 1999). This illustrates that, overall, the finan- cial sector employs more women than men.7 Finance and Insurance Health and However, women are in the minority in management po- Social Services sitions in the financial sector. In 2014, just over a fifth Wholesale and of management positions in savings banks were held by Retail Trade Information and women. In private banks, women made up almost one- Communication third of personnel not employed under collective wage Manufacturing agreements, and the corresponding figure for coopera- tive banks was just under 22 percent. In the insurance Energy industry, the share of office-based female senior man- 8 Accommodation agers was over one-quarter. and Food Service Construction 5 Findings from this analysis can be found in the following article in the Public present edition of DIW Economic Bulletin: E. Holst and A.